Items are based on the information below:
A cable network provider in a small town has 500 subscribers and he used to collect Rs. 300 per month from each subscriber. He proposes to increase the monthly charges and it is believed from the past experience that for every increase of Rs. 1, one subscriber will discontinue the service. Based on the above information, answer the following question :
Total revenue ‘R’ is given by (in Rs.)
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → R = (300 + x)(500 − x)
Let the monthly charge be increased by Rs x. Then
\(\text{charge per subscriber} = 300 + x\)
\(\text{number of subscribers} = 500 - x\)
Revenue = charge per subscriber × number of subscribers:
\(R = (300 + x)(500 - x)\)